News from Sen. Karen Fraser                                         June 22, 2015


Dear Constituents—-

I’m pleased to report that significant progress is being made on THE most difficult challenge of this Session—improving funding for “Basic Education” in order to comply with:

  • The State Supreme Court decision (“McCleary”) which quite clearly defined what constitutes the legal obligations of state government and, thus, statewide taxpayers; and
  • Voter-passed initiatives, including Initiative 1351, approved last Fall, which mandates funding thousands of additional teachers and support staff in our schools.

By several years from now, some estimate the state must increase state K-12 funding by about $5 billion per biennium. This includes the state “taking over” those amounts of “Basic Education” now included in local levies (60-80% of levy amounts) in our 295 school districts.

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This HUGE increase makes this one of the most fiscally challenging Sessions in state history.

The new Court-declared prohibition against funding any portion of “Basic Education” from local levies requires the Legislature to find a way to gradually, but quickly, shift the burden off local levies and back on to the state. This is a very complicated challenge!

To some, the good news is that this could result in a reduction in local levies. But, the challenge is how to find the increased state money to fund the state taking over this levy reduction, and also to fund other major Court and voter mandated increases.

This must be achieved without decimating all other state services, such as higher education, public safety, health and human services, local government support, and other critical general government services.

Bipartisan compromise proposal  

A bipartisan group of legislators (Democratic Senators Christine Rolfes and Jim Hargrove, and Republican Senators Bruce Dammeier and Ann Rivers) have worked extensively on an approach to begin to address our state’s response to funding education. They deserve our appreciation for their work on this great first step.

TVW 6130

Senators from both sides of the aisle acknowledge that the price tag for fully phasing in compensation for all educational staff will take at least $3.5 billion.

A public hearing on the bill (SB 6130) was held recently in the Senate Ways & Means Committee. This bill provides a foundation for further work – it is not a final product and still needs refining. (Click the photo to play the hearing.)

Introduction of Senate Bill 6130 allows a public vetting to occur, so that teachers, districts, parents, taxpayers, and all concerned can help work through its complex implications.

Important key provisions:

  • Acknowledges what the State Supreme Court has been saying for years, by including educator compensation in the statutory definition of “Basic Education” for the first time.
  • Clarifies that local levies cannot pay for state “Basic Education” obligations by clearly establishing what is and is not included in “Basic Education” and revises levy limits over time.
  • Specifies that new revenue is needed to fulfill these expanded state obligations.
  • States that major reductions to non-K-12 areas of the budget will not occur as a way to fund these expanded obligations.

A more detailed outline of the compromise proposal – Senate Bill 6130

The policy changes in this bill are not the perfect solution. That’s why there is a two-year delay; to provide time for the Education Funding Council to refine recommendations and time for the Legislature to enact different recommendations and funding. The bill:

  • Makes the effective date of the Act subject to revenue sources being enacted which generate sufficient additional funds to fully fund it.
  • Prohibits use of local levies to fund the “Basic Education” obligations of state government and limits future local levies.
  • Authorizes use of local levies to fund education enhancements, which is additional to “Basic Education.”
  • Specifies that the statutory definition of “Basic Education” includes statewide salary allocations that are competitive and market based.
  • Phases in a new salary allocation model for teachers linked to the teacher certification system.
  • Requires a comparable wage analysis every four years to maintain competitive salaries.
  • Protects existing collective bargaining agreements and requires future agreements to be consistent with the Act.
  • Creates a School Employee Wages Council to make recommendations on a method to vary salaries by region of the state to account for cost of living differences.
  • Requires school districts to report specifically on how state, federal, and local revenues are used, and to separately account for “Basic Education” and “Non-Basic Education” spending.
  • Requires the State Auditor to review expenditure of local levy funds in their regular school district audits.
  • Changes the local school district levy and local effort assistance processes.
  • Re-codifies existing statutes addressing “Basic Education” in a single Chapter of state law for ease of researching and understanding the law.

The bill also establishes a new Education Funding Council to monitor the implementation of the Act, to review the salary and levy policies in the bill, to make recommendations to avoid unintended consequences, and to develop and recommend different plans to the Legislature, if needed.

Our regressive tax structure doesn’t help solve the problem

Undoubtedly, the state’s revenue structure will have to be modified to increase revenue to pay for all of this. The problems with the state’s tax structure are many:

  • Over the past 25 years, state revenue collections as a percent of total personal income in the state have fallen by nearly 30 percent!

The chart below illustrates this—AND predicts that the revenue collections will continue to decline as a percentage of personal income.

  • In recent years, we have also seen a long, steady decline in property tax rates. All state property taxes are dedicated to K-12 education. Thus, the state is collecting less money for education from this source while obligations are increasing.

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Washington State’s tax policy is, in effect, “the poor pay more.” Low income people pay a substantially higher percent of their incomes in state and local taxes than do the wealthy.

  • People who earn less than $21,000 per year pay 16.8% of their income.
  • People who earn $507,000 or more pay 2.4%.

We need to find a way to bring in more revenue that is fairer to our low-income and middle-class families and individuals.

Please continue to contact me with your suggestions, comments, concerns, and questions about these budget and revenue challenges—and other matters before us.

Until next time,

Karen Fraser_signature